Philippines: Market not yet ready for takaful
Source: Middle East Insurance Review | Sep 2018
Takaful could take some time to be introduced in the Philippines given the regulatory challenges, Insurance Commissioner Dennis B Funa said in a report by the Inquirer.
“I have studied takaful. It’s a bit complicated because the rules are totally different from those provided in the Insurance Code,” Mr Funa said.
A new law may have to be drafted or we will have to write a totally new rule [for Islamic insurance],” he said.
“For example, the concept of interest is not allowed in Islamic rules. Investments will have to be made in sukuk or Islamic bonds,” he said.
The terms are also very different, he added. “We will have to hire an Islamic consultant with knowledge of shariah laws. I don’t think there is such a Filipino expert, so it will have to be foreign.”
Also, the domestic demand for takaful would likely be “initially small because the market will have to be middle-class Muslims,” he said, adding that this segment was still small.
The total Muslim population in the Philippines stands at 6%, according to a 2015 report from the Philippine Statistics Authority. M